BMI Releases Mobile Music Projections For 2010: Ringback-Tone Sales Flattening, Streaming Rising

Posted in News on October 5, 2010

BMI released its annual U.S. mobile music projections for 2010 at the CTIA Enterprise and Applications Show in San Francisco on October 5. BMI valued the 2010 retail ringback-tone market in the United States at $181 million, down slightly from its revised 2009 retail forecast of $195 million. A ringback tone is a musical work that is performed to the caller when they place a call to a participating mobile subscriber.

“The growth of the ringback-tone market showed us that there is an appetite for streaming-based mobile music services,” said Richard Conlon, BMI’s Senior Vice President of Corporate Strategy, Communications and New Media. “However, we are seeing the market move away from the short-form 30-second experience of ringtones and ringback tones and into a longer-form streaming mode. It’s a new chapter in the mobile entertainment story, a development we have been expecting for some time.”

BMI first saw a fall-off in wireless-carrier ringback revenues in the second quarter of 2010. BMI’s analysis reveals that pre-pay services have held strong in the market, significantly outperforming traditional monthly billing-based services in ringback sales on average-revenue-per-unit (ARPU) basis. Pre-pay service sold between 2.75 and 3.5 ringback-tone units per subscriber in the first quarter of 2010, as opposed to traditional monthly billed services, which sold .25 to .5 units per subscriber in the same period.

Conlon pointed out that, despite this, there are still a number of bright spots. BMI’s data shows that the overall use of ringbacks has not diminished, even though sales have flattened. “We believe that this is a result of the emerging trend of bundled services, where ringbacks are made available as part of a package,” he said.

“The falloff in the ringback-tone market mimics the deceleration of ringtone revenues several years ago, which actually sparked the birth of ringback,” noted Conlon. “We are poised for another form factor and consumer behavior shift. This shift is driven by the increase in handheld data devices, enhanced content offerings and improved wireless infrastructure. The industry is coming into alignment to deliver new streaming-based services that we feel will equate to growth.”

BMI’s study is based on census data on the buying habits of 225 million U.S wireless subscribers, covering nearly 80% of the wireless subscriber market. BMI’s systems track song titles and revenues associated with the U.S. use of ringback-tone services, streaming audio, and streaming audio/visual services. The company’s database of U.S. earnings and titles is believed to be the most comprehensive in the industry.

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